Will the Industry's Effort Help with Murky SEC Regulations?

The U.S. Securities and Exchange Committee known as the SEC,
has had rulings before that baffled cryptocurrency insiders. Recently, the SEC fined the
cryptocurrency project EOS, $24 million dollars as a penalty for an unlawful
2017 ICO. It is important to note that EOS reportedly
raised a whopping $4 billion dollars. Some other cryptocurrency projects that
started as ICOs were less lucky. Paragon & Airfox ICOs were fined $250,000
and ordered to
compensate investors in 2018 by the SEC.

The SEC
has hinted that Bitcoin & Ethereum are not securities in the past.
Despite that, they are far from being clear as to which cryptocurrencies
constitutes a security. In a surprise move, a handful of cryptocurrency
industry leaders collaborated to internally regulate and attempt to classify
securities.

Will the SEC Adhere to the Crypto Rating Council?

Some of the biggest names in the world of cryptocurrencies
have collaborated to create the Crypto Rating Council. This includes Coinbase,
Bittrex, Circle, Kraken, Genesis Global Trading, and Greyscale invest.

Essentially the Crypto Rating Council will rate and rank
different cryptocurrency assets on a 1 to 5 scale. The lower the score, the more
likely the are to be considered a security. The rating will be a combined score
of multiple factors. This includes a project's white paper, social media
standing, functionality, asset issuance history and codebase contributions to
name a few.

So far, no hints have been given as to what will be the
first asset they'll grade.

Currently no regulators endorse the ratings issued. Neither
the SEC nor the CFTC is involved, although the Crypto Rating Council have
shared their methodology with the SEC.

While there is no indication that the SEC will take any
ratings to heart, the Crypto Ratings Council might be able to provide clear standards
for the industry.

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